Mizuho cuts GitLab stock price target to $72, maintains Outperform

Published 04/03/2025, 11:16
Mizuho cuts GitLab stock price target to $72, maintains Outperform

On Tuesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on GitLab Inc (NASDAQ:GTLB), reducing the price target to $72 from the previous $80, while preserving an Outperform rating on the company’s shares. With the stock currently trading at $56.25 and analyst targets ranging from $60 to $90, InvestingPro data shows 24 analysts have recently revised their earnings expectations upward for the upcoming period. The adjustment followed GitLab’s financial report, which showed a 29% year-over-year increase in revenue for the fourth quarter, surpassing both Mizuho’s and Wall Street’s projections of around 26%.

The company’s management highlighted a robust demand for its Ultimate, Dedicated, and Duo product tiers. Additionally, GitLab’s initial revenue guidance for the fiscal year 2026 was reported to be slightly above Mizuho’s estimate but marginally below the consensus. The company’s impressive 89% gross profit margins and 32% year-over-year revenue growth support Mizuho’s view of the guidance as conservative enough.

Mizuho’s analysts expressed continued confidence in GitLab’s growth prospects, citing the company’s ability to expand its customer base, implement price increases, and realize the potential for upselling its products. InvestingPro analysis reveals strong financial health indicators, including a healthy current ratio of 2.57 and more cash than debt on its balance sheet. Subscribers can access 8 additional key ProTips and comprehensive financial metrics. The firm’s positive outlook is based on these factors, which they believe will drive GitLab’s high-level execution and growth.

The report by Mizuho underscores GitLab’s performance in the fourth quarter and its potential moving forward. With a market capitalization of $9.13 billion, GitLab’s strategy and product offerings are expected to contribute to its ongoing success, as indicated by the maintained Outperform rating despite the slight reduction in the price target to $72. According to InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, with detailed valuation metrics available in the Pro Research Report.

In other recent news, GitLab Inc. reported its fourth-quarter and full-year fiscal 2025 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $0.33, exceeding the anticipated $0.23, while revenue for the quarter reached $211.4 million, surpassing the forecasted $206.15 million. This marks a 29% year-over-year growth in revenue, contributing to a full-year revenue of $759.2 million, which is a 31% increase from the previous fiscal year. GitLab’s strong performance is attributed to its strategic focus on expanding its customer base and enhancing its product offerings in the DevSecOps market.

Additionally, GitLab has projected revenue for Q1 FY26 between $212 million and $213 million, representing a 25-26% growth. The company also expects a non-GAAP net income per share of $0.14 to $0.15 for the upcoming quarter. For the full fiscal year 2026, GitLab anticipates revenue between $936 million and $942 million, with non-GAAP net income per share ranging from $0.68 to $0.72. In terms of market positioning, GitLab continues to lead in the DevSecOps sector with new AI integrations, maintaining a strong dollar-based net retention rate of 123%.

On the analyst front, GitLab’s stock has received positive attention, with UBS and Goldman Sachs analysts highlighting the company’s strong execution and growth prospects. The company’s recent appointment of Ian Steward as Chief Revenue Officer is expected to bolster its go-to-market strategy. GitLab’s unique offering of a single-tenant SaaS solution, GitLab Dedicated, has seen significant adoption, particularly among industries with complex security and compliance requirements, contributing to a 90% year-over-year growth in Q4.

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